How Is Coronavirus Impacting The Global Supply Chain Management

The impact of the COVID-19 pandemic has been visible on almost every industry, right from A-Z. To this, supply chain management is not an exception. Right from the procurement of raw materials from countries where the impact had been all the worse to the final distribution of the finished goods due to recurring lockdowns, the supply chains have seen it all. As per a recent survey conducted, over 60 percent of respondents indicated disruption in their supply chains in India. On the global front, 26 percent of respondents stated that their business demand faced a significant detrimental effect from the COVID-19 shock.

Let us look at the factors that brought about this disruption in the Supply Chain Management one by one:

The emergence of the Chinese virus: Most of the countries with disrupted supply chains across the globe have a high dependence on China for their raw materials and even the finished products. Regarded as the dominant “world factory,” this put the supply chains at an increased risk. For instance, more than 200 of the Fortune Global 500 firms have a presence in Wuhan, the highly industrialized province where the outbreak originated, and the companies with reliance on Tier 1 and Tier 2 of supply chains faced the maximum disruption.

Consistent lockdowns and downtrodden state of the economy: With areas declared as containment zones and with persistent lockdowns, the supply chain demands faced a significant decrease and greater fluctuation in certain domains. While on the opposite side, the surging demand for food items and groceries went right through the roof, thereby baffling the state even further!

Breakdown in resilience: Supply chains have seen it all but this was an unprecedented time shaking the very resilience of supply chain industries due to the panic shopping and resulting crisis and shortage!

Major GSC disruptions: The pipelines of GSCs, from raw materials supply to delivery of products, are heavily affected by the COVID-19 pandemic. The disruptions in GSCs happened in all sectors.
Major industries affected: Supplies to the domains like high-tech products, automotive parts (fell by 13%) were greatly affected due to the production shutdown of some of their plants in China and other countries.

Disruption in logistics: Factors like labor force shortage, the shutdown of commercial aviation, trade restrictions, sealed borders, etc, contributed to this.

Distorted demands: Accelerated and soaring demands for drugs and medicines, PPE and ventilators, retailing activities (the rush for toilet papers), etc. gave a hard time to the global supply chains.

Conclusion:

No matter what the crisis, supply chains have always been known for their extraordinary resilience. Although it was extremely challenging this time and still continues to be for some of the countries even in the current date, the global supply chains have finally started to get steadier and stable by working 24/7. On the positive side, they have been working round the clock to deliver medical supplies to the areas, countries, and individuals in need, trying their best to bring the nations around the world out of this chaos, as soon as possible!